Actuarial Science
An
Introduction
1
What is an Actuary?
 “An
actuary is a person who analyzes
risks and plans for the financial
security of people and businesses.
Actuaries look at the past and the
present to predict what will be
needed in the future.”
Society of Actuaries & Casualty Actuarial Society
2
Where do Actuaries Work?
 Insurance
Companies
 Commercial Banks
 Investment Banks
 Retirement Funds
 Government
 Consulting Firms
3
How to become an Actuary?
 Majors
Statistics/Math
– Finance
– Economics
–
 Complete
4
Validation by Educational
Experience (VEE)
 Pass Actuarial Exams
VEE – Applied Statistical
Methods
401 – Statistical Methods
for Research Workers
 Statistics 451 – Applied Time Series
 Grade of B- or higher in both
courses
 Statistics
5
VEE – Corporate Finance
 Finance
6
310 – Corporate Finance
VEE - Economics
301 – Intermediate
Microeconomics
 Economics 302 – Intermediate
Macroeconomics
 Economics
7
Course Work in Statistics
and Mathematics
Math 165, 166, 265: Calculus I, II, and III
 Statistics 101
 Statistics 341
 Statistics 342
 Statistics 401
 Statistics 451

8
Course Work in Economics
Economics 101: Principles of
Microeconomics
 Economics 102: Principles of
Macroeconomics
 Economics 301: Intermediate
Microeconomics
 Economics 302: Intermediate
Macroeconomics

9
Course Work in Finance and
Accounting
Accounting 284: Financial Accounting
 Finance 301: Principles of Finance
 Finance 310: Corporate Finance
 Finance 361: Personal Risk
Management and Insurance
 Finance 462: Corporate Risk
Management and Insurance

10
Actuarial Exams
 Every
Fall and Spring
 First 4 exams
1: Probability (P)
– 2: Financial Mathematics (FM)
– 3: Actuarial Models (M)
– 4: Construction and Evaluation of
Actuarial Models (C)
–
11
Exam 1/P
 Probability
(P)
 www.soa.org/files/pdf/edu-2008-fallexam-p.pdf
 Take semester AFTER Stat 341.
12
Exam 2/FM
 Financial
Mathematics (FM)
 www.soa.org/files/pdf/edu-2008-fallexam-fm.pdf
 There is no course at ISU that
prepares you for this exam.
 Take after passing Exam 1/P
13
Exam 3/M

Actuarial Models (M)
–
–
Financial Economics (MFE)
Life Contingencies (MLC)
www.soa.org/files/pdf/edu-2008-fallexam-m.pdf
 There is no course at ISU that prepares
you for this exam.
 Take after passing Exam 2/FM.

14
Exam 4/C
Construction and Evaluation of Actuarial
Models
 www.soa.org/files/pdf/edu-2008-fallexam-c.pdf
 There is no course at ISU that prepares
you for this exam.
 Take after passing Exam 3/M.

15
Things to consider
Start course work early
 Minor in Economics
 Double-Major in Finance??
 Summer Internship after junior year
 Pass rate on Exams

–

16
Between 35% - 40%
Studying for exams is time consuming!
How much??
www.dwsimpson.com/salary.html

Starting Salary (pass 1 exam)
–

After 5 years (pass 3 exams)
–

Middle 80% 114,000 to 183,000
After 15 years (Fellow)
–
17
Middle 80% 64,000 to 85,000
After 10 years (Associate)
–

Middle 80% $46,000 to $61,000
Middle 80% 150,000 to 405,000+
Information on Web
Society of Actuaries – www.soa.org
 Casualty Actuarial Society –
www.casact.org
 Be An Actuary – www.beanactuary.org

–
–
–
18
Exams
Video
FAQ